No one seems to be writing opinion pieces quite the way I would, so I decided to do it myself.

The name? Taverns are places where one goes to discuss the interesting events and things in the world, so this is my tavern.

I will offer my views on politics, economics, and whatever else strikes my fancy.
I will occasionally publish the entire article from another journal for purposes of causing discussion.

 

The New International Elite

Our American leadership is telling us that the export of American jobs is good for the economy. But look at who our leadership consists of.

The Bush family is a set of ~international~ money people They work with wealthy people of all nations. They are people like Henry Kissinger who can't accept an appointment to a US government fact-finding panel because he would have to reveal who his international clients are or like Richard Perle, who has used his position as then chairman of the Pentagon's Defense Policy Board to immediately provide information to international investors he was trying to sell his consulting services to.

These are examples of the wealthy elite in our nation who have been provided the major benefits of the tax cuts. This wealthy elite has loyalty to their own wealth and to their wealthy friends of all nations before they have any loyalty to their own nation or the middle class and poor of any nation. They will make a lot of money by exporting jobs from high labor-cost labor areas like the US to lower labor-cost nations. This wealthy elite is an international class which has loyalty only to the money that gives them their identity.

They may well be right. The export of jobs from the high labor-cost areas to lower labor-cost areas of the world may well be good for the economy, but it won't be good for the American economy. It will be good for the world economy and for the world class wealthy elite, at the expense of the American and Western economies. The world-wide wealth created will belong more to the wealthy elite, not to the middle class of the world.
posted by Richard at 12:46 PM

 

Another Bogus Bush Budget

Bush has offered a new proposed budget. Once again it is a triumph of wishes and fantasy over the reality of what he has himself proposed in other venues.

Paul Krugman presents his views.

Another Bogus Budget
By PAUL KRUGMAN

February 3, 2004

NY Times

well, whaddya know. Even as the Republican leadership strong-armed the Medicare drug bill through Congress, the administration was sitting on estimates showing that the plan would cost at least $134 billion more than it let on. But let's not make too much of the incident. After all, it's not as if our leaders make a habit of faking their budget projections. Oh, wait.

The budget released yesterday, which projects a $521 billion deficit for fiscal 2004, is no more credible than its predecessors. When the administration promises much lower deficits in future years, remember this: two years ago it projected a fiscal 2004 deficit of only $14 billion. What's new this time is that the administration has decided to pay lip service to conservative complaints about runaway spending.

Over the past few months, many pundits have obediently placed the onus for rising deficits on "a vast increase in discretionary domestic spending," or words to that effect. By the way, the Heritage Foundation, which has orchestrated this campaign, is cagier than those pundits; it covers itself by relying on innuendo, never saying outright that domestic discretionary spending is the source of the deficit.

To mollify these critics, the new budget purports to shrink real domestic discretionary spending. This won't happen; even if it did, it would have a negligible impact on the deficit. But it isn't just a fake solution — it's a response to a fake problem.

The prime cause of giant budget deficits is a plunge in the federal government's tax take, which fell from 20.9 percent of G.D.P. in fiscal 2000 to a projected 15.7 percent this year, the lowest share since 1950. About 45 percent of this plunge can be attributed to the Bush tax cuts. The rest reflects the end of the stock market bubble, the still-depressed economy and — probably — growing tax sheltering and evasion.

It's true that increased spending also contributes to the deficit, and that there has been a substantial increase in discretionary spending — spending that, unlike such items as Social Security payments, isn't automatically determined by formulas. But the bulk of this increase has been related to national security.

Traditional budget measures distinguish between defense and nondefense discretionary spending. Even by these measures, defense accounts for most of the increase in recent years. But a better measure would group homeland security and other costs associated with 9/11 with defense, not domestic programs. The Center for American Progress — confirming related work by the Center on Budget and Policy Priorities — estimates that from 2000 to 2004 security-related discretionary spending rose to 4.7 percent of G.D.P. from 3.4 percent, while nonsecurity spending rose to only 3.4 percent from 3.1 percent.
In other words, the role of nonsecurity spending in the plunge into deficit is trivial, compared with tax cuts and security spending. (Credit where credit is due: the administration's budget numbers show the same thing.) And even severe austerity on nonsecurity spending won't make a significant dent in the deficit.

So what will it take to get the budget deficit under control? Unless Social Security and Medicare are drastically cut — which is, of course, what the right wants — any solution has to include a major increase in revenue.

Many Democrats have called for a partial rollback of the Bush tax cuts, preserving the "middle class" cuts — those that convey at least some benefit to the 77 percent of taxpayers in the 15 percent tax bracket or below. Such a partial rollback would have reduced this year's budget deficit by about $180 billion; that would help, but one hopes politicians realize that it's not enough.

Another major source of revenue could be a crackdown on tax loopholes and tax evasion, which has reached epidemic proportions. In particular, what's going on with the tax on corporate profits? That source of revenue is down, as a percent of G.D.P., to 1930's levels. No, that's not a misprint. And receipts are not growing nearly as fast as one would expect, given an economic recovery that has bypassed workers but given big gains to their employers. An administration that actually tried to make corporations pay their taxes might be able to find $100 billion or more each year.

An eventual budget solution will involve all this, and more. But the first step is to stop looking for villains in all the wrong places.

posted by Richard at 8:07 AM

 

Military Branch Rivalry Resolved

Three college buddies were commissioned in three branches of the service--Army, Navy, and Marine Corps--where they made their careers. Although they maintained their friendship through the years, they argued long, bitterly, and inconclusively as to which service was the best. They years wore on, and the three were called to their Heavenly rest,...where they continued the dispute.

One day, they encountered Saint Peter, who asked what all the fuss was about. The three officers explained their argument and appealed to St. Peter to tell them once and for all which of their branches was the best.

Saint Peter reflected and admitted the question had never come up before. He agreed, however, to ask God and to get the definitive word.

Some time later, the officers again ran into Saint Peter and eagerly asked if he had received a reply from the Lord. Just then, a snow-white dove, carrying a note in its beak, landed on Peter's shoulder. Saint Peter took the note, unfolded it, and read it to the three officers:

Gentlemen:

Your squabbling and arguing are unseemly and futile. All three of your branches were equally brave, noble, and honorable. You all served your nation with devotion and courage. Take pride in that service, and forget your petty rivalries.

Sincerely,

God (USAF, Ret.)
posted by Richard at 6:14 AM